As treaties and trade agreements are implemented this year, more U.S. companies are looking at the Association of Southeast Asian Nations for fresh business opportunities. Fortunately, a whole host of logistics and transportation service providers are laying the groundwork to overcome inherent infrastructure challenges.

Today, U.S. trucking companies face more regulations than any time in history—and they claim this “regulatory tsunami” is putting the clamp on U.S. productivity. During this session shippers will gain a better understanding of the current state of trucking regulations (HOS & CSA) and the impact they're having on capacity and rates.

ARLINGTON, Va.—Transportation funding is an “explosive” issue facing the country, the nation’s top air cargo representative says.

That’s because of the current infrastructure is outdated and doesn’t have enough financial firepower.

For instance, the current radar-based system of guiding both passenger and air cargo planes in and out of the nation’s airports is long outdated and needs to be replaced by a satellite-based, GPS-type system.

“Radar was invented during World War II—that’s over,” says Steve Alterman, president of the Cargo Airline Association who is in favor of a satellite-based radar system for aircraft control.

Asked by LM if he thought such a satellite-based system was ready for commercial airline use, Alterman replied, only half in jest: “It’s in your car right now, for crying out loud.”

The Federal Aviation Administration has mandated such a satellite-based system known as NextGen. But the federal government has stalled over installation of such a system because of funding shortfalls.

“Who pays for what?” Alterman said. “Will the current system fund future transportation needs? If not, what are the options?”

They include:
-Maintaining the current system, with possible adjustments to meet growing infrastructure needs.
-Replace existing taxes with a “user fee” system with a continuing contribution from the general U.S. fund.
-Replace existing taxes with a system based solely on fuel taxes with a continuing contribution from the general U.S. fund.
-Air shippers currently pay a 6.25 percent waybill tax. But perhaps that system needs to be augmented with other user fees, Alterman suggested. Alterman said he is not advocating any particular alternative.

Environmental issues are a huge “wild card,” Alterman said. Aircraft noise and pollution have long faced environmentalists’ ire and reducing air freight’s carbon footprint is “a major challenge,” he said.

Funding has been stalled because the FAA reauthorization legislation is still stalled on Congress. Separate bills have passed both the House and Senate, but Alterman says there is no guarantee that there will be a bill before the 2010 midterm elections.

Whatever passes, he said, must include enough funding to accomplish implementation of the NextGen satellite-based guidance systems, Alterman said. Alterman and others spoke at the NIT League spring policy forum on June 10 outside Washington.

Kurt J. Nagle, president and CEO of the American Association of Port Authorities, said ports are investing more than $2 billion annually to improve facilities. But he said a “strong federal partnership” is necessary to update those facilities to keep up with growth in imports and President Obama’s charge to double exports by 2014.

“Current investments are not keeping pace with demand, despite billions of dollars in user fees paid by shippers,” Nagle said.

Congestion around ports long has dogged truckers and the maritime communities as both sectors try to take full advantage of efficiencies of both modes.

“Bottom line is current transportation policy does not address current freight needs,” Nagle said.

Shippers currently pay $1.5 billion in Harbor Maintenance Tax fees. But only about $800 million is being appropriated this year to deepen and widen port facilities to accommodate deeper, wider ships.

Leo Penne, program director for intermodal and industrial activities for the American Association of State Highway and Transportation Officials (AASHTO), said the road to reauthorization any transportation program is “never” a straight line route.

“It is not easy to raise and the gas tax and it is not anything to do anything this year,” Penne said. “But it does not get easier.”

If a one-cent increase in the fuel tax is not politically feasible in an election year, Penne said, replacing that system with a vehicle-mile tax might even be more difficult.

“It’s very simple—we need to invest between 50 percent and 100 percent more to either maintain or improve the current system we have,” Penne said. “That is very difficult to do.”

AASHTO is calling for a $375 billion bill for highways, $100 billion for transit, $40 billion for freight and $50 billion for intercity passenger rail.

About the Author

John D. SchulzContributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!

Get timely insider information that you can use to better manage yourentire logistics operation.

Recent Entries

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in January dropped 1.2 percent to $89.3 billion.

In today's supply chain, the only constant is change.
Our white paper 'Change Your Perspective: Four Keys to Effectively Adapting to Rapid Change in the Distribution Center Environment' provides key insights on not only adapting to trends, but which trends will enable you to achieve running the warehouse of the future.